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State Industries Promotion Corporation of Tamil Nadu (SIPCOT) Limited, a fully government owned premier institution, established in the year 1972, has been a catalyst in development of small, medium and large scale industries in Tamil Nadu.

policies :

Policy on Steel Industry


Steel industry : Important Policy Measures

  1. In the new Industrial Policy announced in July, 1991 Iron and Steel industry, among others, was removed from the list of industries reserved for the public sector and also exempted from the provisions of compulsory licensing under the Industries ( Development and Regulation) Act, 1951.

  2. With effect from 24.5.92, Iron and Steel industry has been included in the list of `high priority' industries for automatic approval for foreign equity investment upto 51%. This limit has been recently increased to 74%.

  3. Price and distribution of steel were deregulated from January, 1992. At the same time, it was ensured that priority continued to be accorded for meeting the requirements of small scale industries, exporters of engineering goods and North Eastern Region of the country, besides strategic sectors such as Defence and Railways

  4. The trade policy has been liberalised and import and export of iron and steel is freely allowed. There are no quantitative restrictions on import of iron and steel items, covered under Chapter No. 72 of the ITC(HS) Code. The only mechanism regulating the imports is the tariff mechanism. Tariffs on various items of iron and steel have drastically come down since 1991-92 levels and the government is committed to bring them down to the international levels.

  5. Freight equalisation scheme was modified in January'92, removing freight disadvantage to states located near steel plants in the country. At the same time, it was ensured that far-flung areas and distant states were protected by stipulating that the main producers charge either actual freight or freight element existing prior to withdrawal of the scheme, whichever is less.

  6. Levy on account of Steel Development Fund was discontinued from April'94 providing greater flexibility to main producers to respond to market forces.

  7. Iron & Steel are freely importable as per the Extant Policy

  8. To check unbridled cheap imports of steel the Government has fixed floor prices for seven items of finished steel viz. HR coils, HR sheets, CR coils, Tinplates, CRNO and ASBR.

  9. Iron & Steel are freely exportable.

  10. Advance Licensing Scheme allows duty free import of raw materials for exports.

Policy on Iron Ore Exports

  1. The existing Export & Import Policy (Exim Policy) permits direct exports of iron ore from Goa and Redi sector to all destinations by the iron ore producers, irrespective of the iron content. The Kudremukh Iron Ore Company Ltd. (KIOCL) is the canalising agency for its own products (iron ore concentrates and iron ore pellets) since it is a 100% Export-Oriented Unit (EOU). Iron ore of Fe content upto 64% is completely decanalised. Exports of ore with iron content exceeding 64% from other sectors of the country are canalised through a Government agency, namely MMTC. The major buyers of Indian Iron Ore are the Japanese Steel Mills (JSMs).

  2. The earlier contract for supply of iron ore by MMTC/KIOCL to the Japanese Steel Mills (JSMs) terminated on 31.3.96. The Cabinet in its meeting held on 8.12.95 approved the proposal of Ministry of Commerce for entering into another five year contract with Japan for export of iron ore. The broad guidelines given in this regard are :-

  • Iron ore surplus to domestic requirement may continue to be exported; and

  • The export of high grade ore (run of mine Fe content above 65%) would be within the prescribed ceilings.

Cabinet Ceilings on export of high grade are :

The cabinet in its meeting held on 21.7.98 approved the following ceilings proposed by Ministry of Commerce w.e.f. 1.4.1998 and which would be valid for a period of three years.
Valid for 3 years from 1.4.1998 ( in million tonne/annum )
Grade Quantity Range
Bailadila lumps Not exceeding 3.0
Bailadila fines Not exceeding 3.8
High grade lumps (Bellary-Hospet) Not exceeding 1.2
High grade fines (Bellary-Hospet) Not exceeding 2.0

Manganese Ore

Export policy of manganese ore is decided keeping in view the need for conserving high grade ores. Alongwith this, effort is also made to replace the export of ores with export of value added items For the year 1999-2000 the maximum ceilings of manganese ore allowed for export are as follows :

ITEM Ceiling for 1998-99 (in lakh tonnes)
Medium Grade Manganese Ore/blended ore containing 38% to 46% manganese and more than 0.15% Phos. 1.00
Medium Grade Manganese ore/blended ore containing 38% to 46% manganese and more than 0.10 % Phos. 0.50
Low grade manganese ore/blended ore containing less than 38% manganese. 4.00
Manganese ore fines below 12mm in size containing less than 44% manganese. 1.50

Chromite Ore

Keeping in view the limited reserve of Chromite ore in the country, only certain grades of ore are allowed for export. Emphasis has been laid on export of beneficiated chromite concnetrates. From the year 1997-98, a five year Export policy has been decided upon by Government so us to enable the exporters to establish their presence in the international market.


 
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